Syarikat khas ambil alih konsesi jambatan Pulau PinangKUALA LUMPUR 4 Ogos - Kerajaan mewujudkan sebuah syarikat khas (SPV) 100 peratus miliknya sebagai pemegang konsesi Jambatan Kedua Pulau Pinang, yang seterusnya akan mengagihkan kontrak membina jambatan itu, kata Menteri Kewangan Kedua, Tan Sri Nor Mohamed Yakcop, hari ini.Beliau berkata, kerajaan akan memutuskan pihak mana yang akan memungut tol dan kadar tol, kemudian.Pada mulanya, konsesi dan penswastaan Jambatan Kedua Pulau Pinang diberikan kepada UEM Group dan projek itu sepatutnya dilaksanakan atas dasar bina dan pindah."Dulu, cadangannya adalah bagi konsesi (membina dan menguruskan jambatan itu). Sekarang ia akan dilaksanakan sebagai satu kontrak," kata Nor Mohamed kepada pemberita pada program 'Wanita Bersama Pemimpin' di sini."Itulah sebabnya ditubuhkan SPV itu, yang akan menjadi seperti pemegang konsesi dan pihak manapun yang membina jambatan itu, akan melakukannya sebagai satu kontrak," katanya.Menurut satu laporan hujung minggu kerajaan akan melaksanakan projek Jambatan Kedua Pulau Pinang dengan menubuhkan SPV yang diberi nama Jambatan Kedua Pulau Pinang Sdn. Bhd. (JKPP), dan mengurangkan 40 peratus daripada kos kontrak yang sepatutnya diberikan kepada UEM Builders Bhd. pada awalnya.Nor Mohamed berkata, beliau belum tahu pihak mana yang akan menerima kontrak itu tetapi menegaskan bahawa pihak yang mendapat kontrak itu tidak perlu bimbang tentang mengumpul dana berbanding pemegang konsesi.Laporan sebuah penerbitan mingguan juga menyebut bahawa berikutan penubuhan JKPP, sumber-sumber berkata, surat anugerah diberikan kepada Chinese Harbour Engineering Company Ltd. (CHEC) dan UEM Builders, masing-masing melibatkan wang berjumlah RM2.3 bilion dan RM1.3 bilion bagi pembinaan bahagian-bahagian tertentu jambatan itu.Sementara itu, sebahagian besar agihan kerja yang diberikan kepada CHEC tidak berubah daripada kontrak asal, tetapi yang diberikan kepada UEM Builders telah dikurangkan sebanyak RM900 juta.Menurut laporan itu, UEM Builders tidak begitu menyenangi pengurangan kontrak itu dan ia masih belum menunjukkan tanda-tanda sama ada mahu menerima tugasan itu di bawah syarat-syarat sekarang.
P/S : Tak tahu bila nak siap, Chinese Harbour Engineering Company Ltd. (CHEC) Company dari malaysia ke or overseas? Kalau susah2 sangat, kasi sahaja untuk company malaysia, IJM pown ade bule joint!
Monday, March 30, 2009
Penang 2nd Bridge in Parliament
03 Mac, 2009 17:03 PM
Kos Projek Jambatan Kedua Pulau Pinang Tetap Pada RM4.3 BilionBy: Ramjit-->
KUALA LUMPUR, 3 Mac (Bernama) -- Kos pembinaan projek Jambatan Kedua Pulau Pinang masih tidak berubah pada RM4.3 bilion walaupun harga minyak mentah dunia turun, kata Timbalan Menteri di Jabatan Perdana Menteri, Devamany Krishnasamy.Beliau berkata kos kontrak projek itu tertakluk kepada "variasi harga" bagi beberapa item tertentu."Kelewatan kepada jadual pelaksanaan projek ini juga tidak membimbangkan dan dijangka tidak akan menjejaskan tempoh siap projek ini yang dijadualkan pertengahan tahun 2012," katanya ketika sesi soal-jawab di Dewan Rakyat, hari ini.
Beliau berkata demikian ketika menjawab soalan Lim Guan Eng (DAP-Bagan) yang meminta kerajaan persekutuan menyatakan sama ada kos pembinaan projek itu berkurangan berikutan penurunan harga minyak serta kedudukan pemberian tender pakej kedua (superstruktur) dan ketiga (lebuh raya darat), sebab-sebab kelewatan dan tarikh persiapan.Devamany berkata terdapat sedikit kelewatan kepada jadual pelaksanaan projek itu disebabkan syarikat kontraktor masih belum dapat memasuki kawasan tapak di Batu Kawan kerana membabitkan nelayan, penternak ikan serta penternak kerang yang akan terjejas akibat projek itu.
Beliau berkata kerajaan persekutuan telah memuktamadkan rundingan dengan kerajaan negeri Pulau Pinang serta lima penternak kerang yang terjejas berhubung dengan bayaran pampasan."Pihak syarikat Jambatan Kedua Sdn Bhd (JKSB) akan membuat bayaran yang berkaitan dan penternak-penternak kerang ini bolehlah mengosongkan tapak kawasan tersebut bagi membolehkan syarikat kontraktor memasuki kawasan kerja pada bila-bila masa bulan ini," katanya.
Menurutnya, pakej kedua superstruktur telah diberikan kepada UEM Builders Bhd tertakluk kepada persetujuan akhir antara JKSB dengan UEM Builders berhubung harga kos pembinaan superstruktur berkenaan yang akan dimuktamadkan tidak lama lagi.
Sementara pakej ketiga (lebuh raya darat), Devamany berkata pelaksanaan projek akan dilakukan secara tender terbuka dan JKSB sedang dalam persiapan menyediakan dokumen tender.Jambatan sepanjang 26 kilometer keseluruhannya menghubungkan Batu Maung di bahagian pulau dengan Batu Kawan di tanah besar.Projek pembinaan jambatan itu adalah usahasama antara UEM Builders dan China Harbour Engineering.-- BERNAMA
Kos Projek Jambatan Kedua Pulau Pinang Tetap Pada RM4.3 BilionBy: Ramjit-->
KUALA LUMPUR, 3 Mac (Bernama) -- Kos pembinaan projek Jambatan Kedua Pulau Pinang masih tidak berubah pada RM4.3 bilion walaupun harga minyak mentah dunia turun, kata Timbalan Menteri di Jabatan Perdana Menteri, Devamany Krishnasamy.Beliau berkata kos kontrak projek itu tertakluk kepada "variasi harga" bagi beberapa item tertentu."Kelewatan kepada jadual pelaksanaan projek ini juga tidak membimbangkan dan dijangka tidak akan menjejaskan tempoh siap projek ini yang dijadualkan pertengahan tahun 2012," katanya ketika sesi soal-jawab di Dewan Rakyat, hari ini.
Beliau berkata demikian ketika menjawab soalan Lim Guan Eng (DAP-Bagan) yang meminta kerajaan persekutuan menyatakan sama ada kos pembinaan projek itu berkurangan berikutan penurunan harga minyak serta kedudukan pemberian tender pakej kedua (superstruktur) dan ketiga (lebuh raya darat), sebab-sebab kelewatan dan tarikh persiapan.Devamany berkata terdapat sedikit kelewatan kepada jadual pelaksanaan projek itu disebabkan syarikat kontraktor masih belum dapat memasuki kawasan tapak di Batu Kawan kerana membabitkan nelayan, penternak ikan serta penternak kerang yang akan terjejas akibat projek itu.
Beliau berkata kerajaan persekutuan telah memuktamadkan rundingan dengan kerajaan negeri Pulau Pinang serta lima penternak kerang yang terjejas berhubung dengan bayaran pampasan."Pihak syarikat Jambatan Kedua Sdn Bhd (JKSB) akan membuat bayaran yang berkaitan dan penternak-penternak kerang ini bolehlah mengosongkan tapak kawasan tersebut bagi membolehkan syarikat kontraktor memasuki kawasan kerja pada bila-bila masa bulan ini," katanya.
Menurutnya, pakej kedua superstruktur telah diberikan kepada UEM Builders Bhd tertakluk kepada persetujuan akhir antara JKSB dengan UEM Builders berhubung harga kos pembinaan superstruktur berkenaan yang akan dimuktamadkan tidak lama lagi.
Sementara pakej ketiga (lebuh raya darat), Devamany berkata pelaksanaan projek akan dilakukan secara tender terbuka dan JKSB sedang dalam persiapan menyediakan dokumen tender.Jambatan sepanjang 26 kilometer keseluruhannya menghubungkan Batu Maung di bahagian pulau dengan Batu Kawan di tanah besar.Projek pembinaan jambatan itu adalah usahasama antara UEM Builders dan China Harbour Engineering.-- BERNAMA
Earlier report on Penang 2nd Bridge (2008-08-18)
KUALA LUMPUR, Aug 18 2008 (Bernama) - Construction works on the Second Penang Bridge are still going on, says the UEM Group, adding that two years of work worth RM200 million has already been done."The construction work continues. So far, at UEM Group Bhd, there has been no specific... formal instruction to do otherwise," said UEM Group managing director, Datuk Ahmad Pardas Senin to reporters after UEM World Bhd's extraordinary general meeting here Monday."UEM Builders still have a contract with us," he added when was asked on the progress of the project.
Some confusion had set in when UEM Builders Bhd received a letter from Jambatan Kedua Sdn Bhd (JKPP), the company that owns the Second Penang Bridge, on July 30, informing that it had taken over the duties of the Special Task Force and offered certain works on the project to UEM Builders.The government, however, had awarded the project to UEM Group last year on a concession basis whereby UEM Group subsequently awarded the construction of the job to a joint venture of Chinese Harbour Construction Company (CHEC) and UEM Builders with the former holding 51 percent.
"UEM Group did not receive the letter. That letter was sent to UEM Builders and UEM Builders have already replied in a query to Bursa Malaysia," he said.UEM Builders, meanwhile, in filing to Bursa Malaysia on Aug 6 said the scope of work awarded to it by Jambatan Kedua Sdn Bhd was over-lapping with the scope of work being negotiated by its parent company, UEM Group, with the government.UEM Builders said UEM Group was in negotiations with the government pursuant to an earlier decision made by the government to award the project to UEM group on a concession (build-operate-transfer) basis.
Asked if UEM Group would ask for compensation if the government totally revoked the project, Ahmad Pardas said, "I don't want to speculate.""At the end of the day it is a government project. We will always respect. The government has full right to which way they want the project to be." He added that the group was grateful to have been chosen as a party to undertake the project.The project is expected to be completed in 2011."We have done two years work. If we waited until everything is in place, nothing could have been done. We would not have been able to fulfill our undertaking by 2011," Ahmad Pardas said.He also added that if the company is able to progress with all things in place, it would be able to keep the momentum.
Elsewhere, Ahmad Pardas said the discussion on adjustment of toll rates nationwide was ongoing."We will always work and support whatever the government wants to do," he said, adding that nevertheless there would be issues to be addressed if there are to be any changes.-- BERNAMA
Some confusion had set in when UEM Builders Bhd received a letter from Jambatan Kedua Sdn Bhd (JKPP), the company that owns the Second Penang Bridge, on July 30, informing that it had taken over the duties of the Special Task Force and offered certain works on the project to UEM Builders.The government, however, had awarded the project to UEM Group last year on a concession basis whereby UEM Group subsequently awarded the construction of the job to a joint venture of Chinese Harbour Construction Company (CHEC) and UEM Builders with the former holding 51 percent.
"UEM Group did not receive the letter. That letter was sent to UEM Builders and UEM Builders have already replied in a query to Bursa Malaysia," he said.UEM Builders, meanwhile, in filing to Bursa Malaysia on Aug 6 said the scope of work awarded to it by Jambatan Kedua Sdn Bhd was over-lapping with the scope of work being negotiated by its parent company, UEM Group, with the government.UEM Builders said UEM Group was in negotiations with the government pursuant to an earlier decision made by the government to award the project to UEM group on a concession (build-operate-transfer) basis.
Asked if UEM Group would ask for compensation if the government totally revoked the project, Ahmad Pardas said, "I don't want to speculate.""At the end of the day it is a government project. We will always respect. The government has full right to which way they want the project to be." He added that the group was grateful to have been chosen as a party to undertake the project.The project is expected to be completed in 2011."We have done two years work. If we waited until everything is in place, nothing could have been done. We would not have been able to fulfill our undertaking by 2011," Ahmad Pardas said.He also added that if the company is able to progress with all things in place, it would be able to keep the momentum.
Elsewhere, Ahmad Pardas said the discussion on adjustment of toll rates nationwide was ongoing."We will always work and support whatever the government wants to do," he said, adding that nevertheless there would be issues to be addressed if there are to be any changes.-- BERNAMA
Penang Second Bridge
From Wikipedia
The Penang Second Bridge is a new bridge under construction in Penang, Malaysia. It will connect Batu Kawan on the mainland Seberang Perai and Batu Maung on Penang Island. It will be the second bridge to link the island to the mainland after Penang Bridge. The total length of the RM 3 billion bridge is 24 km (15 miles) and will become the longest bridge in Malaysia and Southeast Asia. China Harbour Engineering Co Ltd (CHEC) expected to start work on the second Penang bridge in November 2007 for completion in 2011, but it was then postponed for completion in May 2012, as the construction started late in November 2008, due to the unreasonable demand from UEM which caused the large delay. To reduce the cost of construction, its design is then modified, resemble to the first Penang Bridge. The bridge will be built with a large loan from the People's Republic of China. [1]
Overview
The planned bridge will be a four-lane dual carriageway bridge with two motorcycle lanes. Its total length is 24 km (15 miles). 17 km (10 miles) of the bridge will be across the South Channel, the channel between Penang Island and Seberang Perai. 1.5 km (1 miles) will be on the Batu Maung side, while 6 km (3 miles) will be on the Batu Kawan side. Six expressway interchanges will also be constructed as part of this project. K. Preamakanthan of UEM Construction Sdn Bhd is the project director responsible for this project.
It will have two observation platforms with rest and service areas at the central span. They are designed to resemble pearls. The rest area will be the first "floating" expressway rest area in Malaysia.
History
In August 2006, the Malaysian federal government unveiled a plan to build the Penang Second Bridge in the Ninth Malaysia Plan. In 12 November 2006, the groundbreaking ceremony for the new Penang Second Bridge was performed by Prime Minister of Malaysia, Dato' Seri Abdullah Ahmad Badawi.
After months of soil survey work and test pilling work has been done, China Harbour Engineering Co Ltd and United Engineers Malaysia Berhad (UEM Group) announce that the project is on track for completion in 2011. Construction works was expected to begin in January 2008. [2]
On April 2008, the government announced that the project will be delayed by 9 months due to land acquisition and design issue and also the rising costs of building materials[3]. Newly elected Penang Chief Minister, Lim Guan Eng proposed a toll discount for any delays on the project[4] and also express disappointment of the delay of the construction[5].
On July 2008, Jelutong MP Jeff Ooi reported that the loan for the bridge risked being withdrawn if the shareholder agreement between UEM Builders Bhd and its joint-venture partner China Harbour Engineering Co Ltd is not inked by August 2008. It has been reported that there have been disagreements between the two parties on the apportionment of the cost of building the bridge although the issue should be resolved soon due to UEM having a variation on the price on its portion.[6]
On 8 November 2008, the construction of the Penang Second Bridge by China Harbour Engineering Company (CHEC) has finally started.
Bridge specifications
Overall length - 24 km (15 miles)
Length over water - 17 km (10 miles)
Main span : Length - 250 m (-- feet)
Height clearance (above water) – 30 m (-- feet)
Number of vehicle lanes – 2 + 1 for motorcycles (each direction)
Targeted date to be opened to the public – May 2012
Overall cost – Around RM3 billion
Average time taken to drive from Batu Kawan to Batu Maung – 20 mins
Proposed speed limit on bridge – 80 km/h (-- mph)
Percentage of local contents to be used - 60%
The Penang Second Bridge is a new bridge under construction in Penang, Malaysia. It will connect Batu Kawan on the mainland Seberang Perai and Batu Maung on Penang Island. It will be the second bridge to link the island to the mainland after Penang Bridge. The total length of the RM 3 billion bridge is 24 km (15 miles) and will become the longest bridge in Malaysia and Southeast Asia. China Harbour Engineering Co Ltd (CHEC) expected to start work on the second Penang bridge in November 2007 for completion in 2011, but it was then postponed for completion in May 2012, as the construction started late in November 2008, due to the unreasonable demand from UEM which caused the large delay. To reduce the cost of construction, its design is then modified, resemble to the first Penang Bridge. The bridge will be built with a large loan from the People's Republic of China. [1]
Overview
The planned bridge will be a four-lane dual carriageway bridge with two motorcycle lanes. Its total length is 24 km (15 miles). 17 km (10 miles) of the bridge will be across the South Channel, the channel between Penang Island and Seberang Perai. 1.5 km (1 miles) will be on the Batu Maung side, while 6 km (3 miles) will be on the Batu Kawan side. Six expressway interchanges will also be constructed as part of this project. K. Preamakanthan of UEM Construction Sdn Bhd is the project director responsible for this project.
It will have two observation platforms with rest and service areas at the central span. They are designed to resemble pearls. The rest area will be the first "floating" expressway rest area in Malaysia.
History
In August 2006, the Malaysian federal government unveiled a plan to build the Penang Second Bridge in the Ninth Malaysia Plan. In 12 November 2006, the groundbreaking ceremony for the new Penang Second Bridge was performed by Prime Minister of Malaysia, Dato' Seri Abdullah Ahmad Badawi.
After months of soil survey work and test pilling work has been done, China Harbour Engineering Co Ltd and United Engineers Malaysia Berhad (UEM Group) announce that the project is on track for completion in 2011. Construction works was expected to begin in January 2008. [2]
On April 2008, the government announced that the project will be delayed by 9 months due to land acquisition and design issue and also the rising costs of building materials[3]. Newly elected Penang Chief Minister, Lim Guan Eng proposed a toll discount for any delays on the project[4] and also express disappointment of the delay of the construction[5].
On July 2008, Jelutong MP Jeff Ooi reported that the loan for the bridge risked being withdrawn if the shareholder agreement between UEM Builders Bhd and its joint-venture partner China Harbour Engineering Co Ltd is not inked by August 2008. It has been reported that there have been disagreements between the two parties on the apportionment of the cost of building the bridge although the issue should be resolved soon due to UEM having a variation on the price on its portion.[6]
On 8 November 2008, the construction of the Penang Second Bridge by China Harbour Engineering Company (CHEC) has finally started.
Bridge specifications
Overall length - 24 km (15 miles)
Length over water - 17 km (10 miles)
Main span : Length - 250 m (-- feet)
Height clearance (above water) – 30 m (-- feet)
Number of vehicle lanes – 2 + 1 for motorcycles (each direction)
Targeted date to be opened to the public – May 2012
Overall cost – Around RM3 billion
Average time taken to drive from Batu Kawan to Batu Maung – 20 mins
Proposed speed limit on bridge – 80 km/h (-- mph)
Percentage of local contents to be used - 60%
Wednesday, March 25, 2009
Magna mulling features of RM1.3b project
By Sharen Kaur
Published: 2009/03/25
Magna Prima Bhd (7617) may build luxury residences or office towers, or both, on the 1.05ha prime site in Jalan Ampang, Kuala Lumpur, which it is buying from a school association.
It is learned that Magna is finalising the development features, which will be market-driven."We are doing a study to decide on the best components. It may be office towers, or commercial and residential mix," an official said on condition of anonymity.The project, worth more than RM1.3 billion, will begin in 2012 and be completed in four years.It will be Magna's single largest development to date and its second project in the Kuala Lumpur City Centre area.The first was the RM300 million Avare condominium, neighbouring the Petronas Twin Towers near Jalan Stonor, launched in 2005."Magna aims to start the project in 2012 as it believes the economic situation will improve by then, thanks to the two stimulus packages launched by the government," the official added.The official said it may construct the buildings on its own, or in a venture with a reputable firm to be identified later.
Magna is buying the land on which the 44-year-old Lai Meng Primary School and Kindergarten sits from the Lai Meng Girls School Association for RM148 million.
It may use its own funds as well as borrow to pay for the land, the official said.Under the agreement, Magna is to rebuild the school and kindergarten on land it owns.It is unclear where Magna will rebuild the school.The company has pockets of land in Bukit Jalil and Jalan Kuching, Kuala Lumpur."We have not decided on the location. We will call for open tender to build the school, which will be at a choice location," the official said.
Analysts, who declined to be named, said that Magna is acquiring the land at a fair price and may sell the properties for between RM950 and RM1,000 per sq ft."Assuming 10 times plot ratio, construction cost of RM400 per sq ft and 80 per cent efficiency ratio, it would potentially translate into a total redevelopment cost of RM660 per sq ft, with average selling price of RM950 per sq ft, at 30 per cent margin," said an analyst.
Published: 2009/03/25
Magna Prima Bhd (7617) may build luxury residences or office towers, or both, on the 1.05ha prime site in Jalan Ampang, Kuala Lumpur, which it is buying from a school association.
It is learned that Magna is finalising the development features, which will be market-driven."We are doing a study to decide on the best components. It may be office towers, or commercial and residential mix," an official said on condition of anonymity.The project, worth more than RM1.3 billion, will begin in 2012 and be completed in four years.It will be Magna's single largest development to date and its second project in the Kuala Lumpur City Centre area.The first was the RM300 million Avare condominium, neighbouring the Petronas Twin Towers near Jalan Stonor, launched in 2005."Magna aims to start the project in 2012 as it believes the economic situation will improve by then, thanks to the two stimulus packages launched by the government," the official added.The official said it may construct the buildings on its own, or in a venture with a reputable firm to be identified later.
Magna is buying the land on which the 44-year-old Lai Meng Primary School and Kindergarten sits from the Lai Meng Girls School Association for RM148 million.
It may use its own funds as well as borrow to pay for the land, the official said.Under the agreement, Magna is to rebuild the school and kindergarten on land it owns.It is unclear where Magna will rebuild the school.The company has pockets of land in Bukit Jalil and Jalan Kuching, Kuala Lumpur."We have not decided on the location. We will call for open tender to build the school, which will be at a choice location," the official said.
Analysts, who declined to be named, said that Magna is acquiring the land at a fair price and may sell the properties for between RM950 and RM1,000 per sq ft."Assuming 10 times plot ratio, construction cost of RM400 per sq ft and 80 per cent efficiency ratio, it would potentially translate into a total redevelopment cost of RM660 per sq ft, with average selling price of RM950 per sq ft, at 30 per cent margin," said an analyst.
Friday, March 20, 2009
BinLadin eyes Malaysian partners for bridge jo
From Zaidi Isham Ismail
Published: 2009/03/20
DUBAI: Saudi Arabia's largest construction group, the BinLadin group, may partner Malaysian companies to build a few causeway bridges in Jeddah.Its vice-president for project management, Mohammad Sawan, said discussions are on-going with several Malaysian firms."We are not new in Malaysia and have participated in the construction of several projects such as the Kuala Lumpur International Airport and the Putrajaya mosque. "We are keen to corroborate with Malaysia companies and are also looking at business opportunities in Malaysia," Mohammad told Malaysian journalists on the sidelines of the Malaysia Services Exhibition (MSE) 2009.
Mohammad declined to name the Malaysian companies.But some of the firms participating in the expo include Bina Puri, WCT, IJM Corp, and Sime Engineering.
He added the construction of the causeway bridges, each with a distance of over 100m, comes under a US$1.5 billion (US$1 = RM3.66) package and construction would take over three years.
The bridges would cater to the movement of two million pilgrims performing the haj every year.The BinLadin group has participated in the construction of more than 30 airports worldwide, universities, railways, and highways, among others.
Published: 2009/03/20
DUBAI: Saudi Arabia's largest construction group, the BinLadin group, may partner Malaysian companies to build a few causeway bridges in Jeddah.Its vice-president for project management, Mohammad Sawan, said discussions are on-going with several Malaysian firms."We are not new in Malaysia and have participated in the construction of several projects such as the Kuala Lumpur International Airport and the Putrajaya mosque. "We are keen to corroborate with Malaysia companies and are also looking at business opportunities in Malaysia," Mohammad told Malaysian journalists on the sidelines of the Malaysia Services Exhibition (MSE) 2009.
Mohammad declined to name the Malaysian companies.But some of the firms participating in the expo include Bina Puri, WCT, IJM Corp, and Sime Engineering.
He added the construction of the causeway bridges, each with a distance of over 100m, comes under a US$1.5 billion (US$1 = RM3.66) package and construction would take over three years.
The bridges would cater to the movement of two million pilgrims performing the haj every year.The BinLadin group has participated in the construction of more than 30 airports worldwide, universities, railways, and highways, among others.
Thursday, March 12, 2009
Water concession rescinded in Johor
Thursday March 12, 2009
Water concession rescinded in Johor
By YVONNE TAN
KUALA LUMPUR: Pengurusan Aset Air Bhd (PAAB) has sealed its third water restructuring agreement, this time with the state of Johor which will see it take over RM4.03bil worth of water-related assets in the state. This is the first agreement involving a private concessionaire.
PAAB’s acquisitions from the state of Malacca and Negri Sembilan which were completed in December and January respectively involved takeovers from the state governments.
PAAB chief executive officer Suhaimi Kamaralzaman said: “The most crucial achievement of this deal is getting SAJ Holdings Sdn Bhd, a private concessionaire, to migrate to the new licensing regime and rescind the current concession agreement (in the state).”
“When the concession no longer exists, the scheduled tariff hike in the concession agreement will not apply anymore; hence there will be no tariff hike for Johor this year,” he said at the signing of the agreements yesterday. Suhaimi said the water assets in Johor were acquired at one time book value and was concluded on a “willing-buyer-willing-seller” basis. The handover of water assets is part of the national water services industry restructuring initiative undertaken by the Government involving Peninsular Malaysia and Labuan. Following the migration to the new regime, consumers in Johor will not need to experience a tariff hike of up to 19% this year.
Meanwhile, under the agreements signed yesterday, government-owned PAAB will take over RM4.03bil worth of water-related assets such as water treatment plants, piping networks and reservoirs in Johor belonging to SAJ Holdings, Syarikat Air Johor Sdn Bhd (a unit of Ranhill Utilities) and Johor’s state government. To pay for the assets, PAAB will assume the parties’ related liabilities totalling RM3.18bil which include RM2bil SAJ Holdings Islamic bonds and bank loan.
SAJ will continue to manage the water distribution in the state and will lease the water assets from PAAB for operations and maintenance for a period of 30 years at an annual charge of about RM240mil.
Earlier, Deputy Prime Minister Datuk Seri Najib Tun Razak who was also present at the ceremony said PAAB was expected to spend RM3.5bil in capital expenditure over the next 30 years to upgrade Johor’s water system.
On another note, Suhaimi said PAAB was looking to conclude its next deal with the state of Pahang. As for Selangor, he said PAAB was “expediting” its negotiations with Selangor’s private concessionaries.
Selangor, whose water sector is the most fragmented, is locked in a controversy where the state has made an offer to the four concessionaries involved but PAAB has initiated direct dealings with the concessionaires. A deal however, needs to be formalised by the end of the month or the concessionaires can mpose a 37% tariff hike on water in the state.
Water concession rescinded in Johor
By YVONNE TAN
KUALA LUMPUR: Pengurusan Aset Air Bhd (PAAB) has sealed its third water restructuring agreement, this time with the state of Johor which will see it take over RM4.03bil worth of water-related assets in the state. This is the first agreement involving a private concessionaire.
PAAB’s acquisitions from the state of Malacca and Negri Sembilan which were completed in December and January respectively involved takeovers from the state governments.
PAAB chief executive officer Suhaimi Kamaralzaman said: “The most crucial achievement of this deal is getting SAJ Holdings Sdn Bhd, a private concessionaire, to migrate to the new licensing regime and rescind the current concession agreement (in the state).”
“When the concession no longer exists, the scheduled tariff hike in the concession agreement will not apply anymore; hence there will be no tariff hike for Johor this year,” he said at the signing of the agreements yesterday. Suhaimi said the water assets in Johor were acquired at one time book value and was concluded on a “willing-buyer-willing-seller” basis. The handover of water assets is part of the national water services industry restructuring initiative undertaken by the Government involving Peninsular Malaysia and Labuan. Following the migration to the new regime, consumers in Johor will not need to experience a tariff hike of up to 19% this year.
Meanwhile, under the agreements signed yesterday, government-owned PAAB will take over RM4.03bil worth of water-related assets such as water treatment plants, piping networks and reservoirs in Johor belonging to SAJ Holdings, Syarikat Air Johor Sdn Bhd (a unit of Ranhill Utilities) and Johor’s state government. To pay for the assets, PAAB will assume the parties’ related liabilities totalling RM3.18bil which include RM2bil SAJ Holdings Islamic bonds and bank loan.
SAJ will continue to manage the water distribution in the state and will lease the water assets from PAAB for operations and maintenance for a period of 30 years at an annual charge of about RM240mil.
Earlier, Deputy Prime Minister Datuk Seri Najib Tun Razak who was also present at the ceremony said PAAB was expected to spend RM3.5bil in capital expenditure over the next 30 years to upgrade Johor’s water system.
On another note, Suhaimi said PAAB was looking to conclude its next deal with the state of Pahang. As for Selangor, he said PAAB was “expediting” its negotiations with Selangor’s private concessionaries.
Selangor, whose water sector is the most fragmented, is locked in a controversy where the state has made an offer to the four concessionaries involved but PAAB has initiated direct dealings with the concessionaires. A deal however, needs to be formalised by the end of the month or the concessionaires can mpose a 37% tariff hike on water in the state.
Ong: New LCCT to handle excess passenger load by 2011
Wednesday March 11, 2009
THE passenger load at the KL International Airport will exceed 20 million by 2011 and the new Low-Cost Carrier Terminal (LCCT) will cater to this increasing capacity, said Transport Minister Datuk Seri Ong Tee Keat. He said the design capacity for the new LCCT would be around 30 million but the entire project would consist of various phases, which would allow room for further development.
“This is crucial because by 2011, we anticipate the delivery of bigger aircraft, including the Airbus A380 by Malaysia Airlines,” he said, adding that the present LCCT would not be able to handle the growing passenger load.
Ong said the new LCCT would be ready by 2011 and the total cost was estimated at RM2bil.
He said Malaysia Airports Holdings Bhd would announce the financial details, which were still being ironed out.
On the rebate of 50% on landing charges which would be given from April 1 to all airlines that operate from Malaysia, Ong said he was optimistic that the move would boost the aviation industry and attract more airlines to use KLIA as a regional hub.On whether such a move would affect Malaysia Airports financially, he said: “When you want to enjoy such incentives, you will certainly have to strike a balance.“You need to woo more airlines to come and there will be some degree of reduction in your revenue.”Currently, he said, there are 57 airlines operating from both LCCT and KLIA.
Ong, who is also MCA president, said he was impressed with the government-linked companies’ (GLCs) commitment to enhance corporate social activities in human capital development by establishing 10 non-profit private schools. He said GLCs, which also operated private universities such as Uniten and MMU, were not only helping youngsters study at higher education institutions but were also making corporate social responsibility a culture in the country.
In another development, all parties have welcomed the estimated RM250mil allocated for the Penang International Airport expansion.
State MCA deputy chairman Eng Hiap Boon said the allocation would boost Penang’s economy by attracting more tourists.“With the upgrading of airport facilities, I hope we can attract (more) tourists to Penang.“This also shows the Federal Government has not given up on Penang.”
THE passenger load at the KL International Airport will exceed 20 million by 2011 and the new Low-Cost Carrier Terminal (LCCT) will cater to this increasing capacity, said Transport Minister Datuk Seri Ong Tee Keat. He said the design capacity for the new LCCT would be around 30 million but the entire project would consist of various phases, which would allow room for further development.
“This is crucial because by 2011, we anticipate the delivery of bigger aircraft, including the Airbus A380 by Malaysia Airlines,” he said, adding that the present LCCT would not be able to handle the growing passenger load.
Ong said the new LCCT would be ready by 2011 and the total cost was estimated at RM2bil.
He said Malaysia Airports Holdings Bhd would announce the financial details, which were still being ironed out.
On the rebate of 50% on landing charges which would be given from April 1 to all airlines that operate from Malaysia, Ong said he was optimistic that the move would boost the aviation industry and attract more airlines to use KLIA as a regional hub.On whether such a move would affect Malaysia Airports financially, he said: “When you want to enjoy such incentives, you will certainly have to strike a balance.“You need to woo more airlines to come and there will be some degree of reduction in your revenue.”Currently, he said, there are 57 airlines operating from both LCCT and KLIA.
Ong, who is also MCA president, said he was impressed with the government-linked companies’ (GLCs) commitment to enhance corporate social activities in human capital development by establishing 10 non-profit private schools. He said GLCs, which also operated private universities such as Uniten and MMU, were not only helping youngsters study at higher education institutions but were also making corporate social responsibility a culture in the country.
In another development, all parties have welcomed the estimated RM250mil allocated for the Penang International Airport expansion.
State MCA deputy chairman Eng Hiap Boon said the allocation would boost Penang’s economy by attracting more tourists.“With the upgrading of airport facilities, I hope we can attract (more) tourists to Penang.“This also shows the Federal Government has not given up on Penang.”
Tuesday, March 10, 2009
Irda submits proposed 10MP projects to Govt
Tuesday March 10, 2009
Irda submits proposed 10MP projects to Govt
By ZAZALI MUSA
JOHOR BARU: Iskandar Regional Development Authority (Irda) has submitted its plan to the Federal Government on the infrastructure projects slated for the 10th Malaysia Plan (10MP).
Executive director Harun Johari said that under the current 9MP, the Government had allocated RM6.83bil for infrastructure projects in Iskandar Malaysia.
“We are hoping to get a similar amount of budget or even more under the 10MP, which will start from 2011 until 2015,’’ he told StarBiz.
Harun said some of the projects within Iskandar Malaysia under the 9MP had already started while others would begin soon. All the projects would be completed between 2011 and 2015. Projects approved under the 9MP include road improvement packages, drainage works, river cleaning and public housing. All these projects are in various areas in five flagship zones in Iskandar – Johor Baru City Centre, Nusajaya, Eastern Gate Development, Western Gate Development and Senai.
...
About 80% of the investment in the development region came from the private sector and 20% from the Federal Government.
Iskandar Malaysia has to-date attracted RM43bil investment and the growth corridor is looking to receive RM93bil by 2025.
Irda submits proposed 10MP projects to Govt
By ZAZALI MUSA
JOHOR BARU: Iskandar Regional Development Authority (Irda) has submitted its plan to the Federal Government on the infrastructure projects slated for the 10th Malaysia Plan (10MP).
Executive director Harun Johari said that under the current 9MP, the Government had allocated RM6.83bil for infrastructure projects in Iskandar Malaysia.
“We are hoping to get a similar amount of budget or even more under the 10MP, which will start from 2011 until 2015,’’ he told StarBiz.
Harun said some of the projects within Iskandar Malaysia under the 9MP had already started while others would begin soon. All the projects would be completed between 2011 and 2015. Projects approved under the 9MP include road improvement packages, drainage works, river cleaning and public housing. All these projects are in various areas in five flagship zones in Iskandar – Johor Baru City Centre, Nusajaya, Eastern Gate Development, Western Gate Development and Senai.
...
About 80% of the investment in the development region came from the private sector and 20% from the Federal Government.
Iskandar Malaysia has to-date attracted RM43bil investment and the growth corridor is looking to receive RM93bil by 2025.
Wednesday, March 4, 2009
Gamuda rises on JPMorgan upgrade
Gamuda rises (to RM1.92) on JPMorgan upgrade
Published: 2009/03/04
GAMUDA Bhd rose 1.1 per cent to RM1.92 at lunch break, set for the biggest gain since Feb 27. Malaysia’s second-biggest builder was raised to “overweight” from “neutral” at JPMorgan, which said the company is in a
“comfortable position” to benefit from spending by the government’s stimulus package. - Bloomberg
Published: 2009/03/04
GAMUDA Bhd rose 1.1 per cent to RM1.92 at lunch break, set for the biggest gain since Feb 27. Malaysia’s second-biggest builder was raised to “overweight” from “neutral” at JPMorgan, which said the company is in a
“comfortable position” to benefit from spending by the government’s stimulus package. - Bloomberg
MAHB identifies site for new budget terminal
MAHB identifies site for new budget terminal
Published: 2009/03/04
MALAYSIA Airports Holdings Bhd (MAHB) has identified the site for the new Low-Cost Carrier Terminal (LCCT), said managing director/chief executive officer, Datuk Seri Bashir Ahmad.
"The site has been identified and we will announce at an appropriate time,"
Bashir told a media briefing held in conjunction with the Minister of Transport Datuk Seri Ong Tee Keat's visit to the KL International Airport (KLIA)in Sepang today. The government recently turned down AirAsia's proposal to build a RM1.6billion airport in Labu, Negeri Sembilan. MAHB was then tasked with building a new LCCT, located near the present terminal at KLIA in Sepang, in close consultations with AirAsia.
"We can't reveal the discussion but it is on-going," he said, when asked on the progress of its negotiation with AirAsia Bhd on the new LCCT.
On pilferage in the airport, Bashir said MAHB committed to reduce and eliminate pilferage from its airport completely. "We are pushing for zero pilferage and we have taken steps over the year that the level of pilferage has reduced in our airport. "If we compare our airport to many other airports around the world, ours is very low," he said, but added that MAHB was still not happy. Meanwhile, Ong said the ministry has submitted many projects in the proposal to the Ministry of Finance to be included in the mini-budget. He said the projects will cover all the major sectors ranging from land transport, maritime as well as aviation. - Bernama
Published: 2009/03/04
MALAYSIA Airports Holdings Bhd (MAHB) has identified the site for the new Low-Cost Carrier Terminal (LCCT), said managing director/chief executive officer, Datuk Seri Bashir Ahmad.
"The site has been identified and we will announce at an appropriate time,"
Bashir told a media briefing held in conjunction with the Minister of Transport Datuk Seri Ong Tee Keat's visit to the KL International Airport (KLIA)in Sepang today. The government recently turned down AirAsia's proposal to build a RM1.6billion airport in Labu, Negeri Sembilan. MAHB was then tasked with building a new LCCT, located near the present terminal at KLIA in Sepang, in close consultations with AirAsia.
"We can't reveal the discussion but it is on-going," he said, when asked on the progress of its negotiation with AirAsia Bhd on the new LCCT.
On pilferage in the airport, Bashir said MAHB committed to reduce and eliminate pilferage from its airport completely. "We are pushing for zero pilferage and we have taken steps over the year that the level of pilferage has reduced in our airport. "If we compare our airport to many other airports around the world, ours is very low," he said, but added that MAHB was still not happy. Meanwhile, Ong said the ministry has submitted many projects in the proposal to the Ministry of Finance to be included in the mini-budget. He said the projects will cover all the major sectors ranging from land transport, maritime as well as aviation. - Bernama
Monday, March 2, 2009
IRDA's next phase to improve services sector
BT 2/3/2009
THE Iskandar Regional Development Authority (IRDA), which oversees development of the Iskandar Malaysia region in Johor, said the second phase of investments there will be focused on improving the services sector.As highlighted in the Comprehensive Development Plan (CDP), it aims to attract total investments of RM73 billion between 2011-2015 in phase two.Under the first phase (2006-2010), it had secured RM40.25 billion from the initial RM47 billion.While it continues to promote the manufacturing sector given its strong base, it believes the second phase will remain to intensify its effort to boost the six services clusters in Iskandar, its former chief executive officer Datuk Ikmal Hijaz Hashim said.
"This provides Iskandar with added resilience to weather cyclical downturns in any particular sector," Ikmal told Business Times."We expect most of the committed investments from 2006-2010 to start their operations when we enter phase two, hence, further boosting the economic activities in the region," he added.IRDA has so far not received any official information of pullout or delay in any project by Arabs, or other investors in the region, Ikmal said.
From the RM40.25 billion in investments secured,
52 per cent is from manufacturing, and
20.3 per cent is real estate based.
Middle East companies have committed RM4.8 billion in real estate."The projects they are investing in are in various stages of implementation. For example, physical works in Medini have begun for the development of the basic infrastructure. Other projects are in the master plan design stage," he said.
The 888ha Medini, located within Iskandar, is Malaysia's single largest urban development. It is divided into three distinct clusters - lifestyle and leisure, culture and heritage, and financial.Projects in the pipeline include the Legoland Theme Park. A Newcastle University UK Medical University Campus is also being set up in Nusajaya in Iskandar.
THE Iskandar Regional Development Authority (IRDA), which oversees development of the Iskandar Malaysia region in Johor, said the second phase of investments there will be focused on improving the services sector.As highlighted in the Comprehensive Development Plan (CDP), it aims to attract total investments of RM73 billion between 2011-2015 in phase two.Under the first phase (2006-2010), it had secured RM40.25 billion from the initial RM47 billion.While it continues to promote the manufacturing sector given its strong base, it believes the second phase will remain to intensify its effort to boost the six services clusters in Iskandar, its former chief executive officer Datuk Ikmal Hijaz Hashim said.
"This provides Iskandar with added resilience to weather cyclical downturns in any particular sector," Ikmal told Business Times."We expect most of the committed investments from 2006-2010 to start their operations when we enter phase two, hence, further boosting the economic activities in the region," he added.IRDA has so far not received any official information of pullout or delay in any project by Arabs, or other investors in the region, Ikmal said.
From the RM40.25 billion in investments secured,
52 per cent is from manufacturing, and
20.3 per cent is real estate based.
Middle East companies have committed RM4.8 billion in real estate."The projects they are investing in are in various stages of implementation. For example, physical works in Medini have begun for the development of the basic infrastructure. Other projects are in the master plan design stage," he said.
The 888ha Medini, located within Iskandar, is Malaysia's single largest urban development. It is divided into three distinct clusters - lifestyle and leisure, culture and heritage, and financial.Projects in the pipeline include the Legoland Theme Park. A Newcastle University UK Medical University Campus is also being set up in Nusajaya in Iskandar.
Wednesday, February 25, 2009
IJM and Talam
Corporate: Talam pushing for debt-conversion plan By Siow Chen Ming The Edge Daily (dated: August 2008)
Talam Corp Bhd, a troubled property developer, is pushing for a massive debt-to-equity restructuring scheme that its lenders may find hard to reject. Not that the proposal is favourable, but because the lenders have limited options. The bulk of the debts concerned have no financial recourse to Talam the listed company, but mainly on the company's operating subsidiaries that develop certain housing projects. "Talam's stance is obvious. Bondholders can either accept the scheme on the table or take over the housing projects, which secure the bonds," says a source. The prospect of the second option is bleak. If bondholders were to take over the housing projects, they will have to confront a group of angry house buyers who are getting frustrated over the slow construction progress in Talam's projects.
Inclusive of debts issued by special purpose vehicles, Talam group's total outstanding borrowings amounted to about RM1 billion.
The largest chunk is in the form of an outstanding RM498 million Islamic bond (BaIDS) issued by special purpose debt vehicle Ambang Sentosa Sdn Bhd. Ambang Sentosa had issued the BaIDS and utilised the proceeds to purchase from Maxisegar Sdn Bhd (wholly owned by Talam) the rights to the sales receivables of the Puncak Jalil township project. The BaIDS is secured on the housing project. According to sources, Talam has proposed to settle the outstanding BaIDS issued by Ambang Sentosa with a final settlement of RM348 million. This will be in the form of RM62 million cash (which is already in the escrow account) and the issuing of RM286 million five-year redeemable convertible preference shares (RCPS) in Talam bearing zero interest. While this indicates a haircut of about 30% or RM150 million, Talam has offered to bondholders the rights to a pool of future sales proceeds, amounting to RM69 million, from the sale of the remnants of unsold units.
The group is also proposing to settle in full another outstanding bond of RM196 million in the form of Murabahah notes facility (MUNIF) issued by indirect wholly owned subsidiary Europlus Corp Sdn Bhd. The group plans to replace the MUNIF with five-year redeemable convertible secured loan stocks bearing zero coupon. The issuing of secured loan stocks is preferred over RCPS because the MUNIF is currently secured on some landbanks, apart from sales receivables from development projects that include Bukit Beruntung I, II, and III, Lagoon Perdana, Kinrara Section 3 and other projects.
On another note, the outstanding RM163 million MUNIF issued by Perkspektif Perkasa Sdn Bhd (PPSB), the developer of the Bandar Pinggiran Cyber township project in Cyberjaya, will also be featured in the debt-restructuring scheme. Unlike the bonds issued by Ambang Sentosa and Europlus, the PPSB's MUNIF has an unconditional financial recourse to Talam.
As for the remaining term loan of about RM230 million, Talam has planned to settle it by issuing RCPS or other instruments that are convertible into Talam shares.
Based on maximum scenario, the conversion of all these instruments, which will be issued to replace the group's debts, may dilute Kumpulan Europlus Bhd (K-Euro)'s interest in Talam to about 25%, from 47% currently. "Talam's management is busy conducting meetings with the lenders. A formal bondholders' meeting will be held in September and if approved, these proposals will be submitted for regulatory approvals. The implementation of the debt-conversion scheme is expected to be next year," says a source.
Talam, once known as the most productive house developer, ran smack into trouble last year (2007). It was unable to carry out construction works in its development projects according to schedule. Work progress in its largest project, Puncak Jalil, has been particularly affected. All these have resulted in the group being unable to receive progress claims from end-financiers and hence led to a mismatch of cash flow to meet debt obligations. The management had previously put the blame for these stalled projects on the shortage of sand, steel, workers and the government's suspension of hill slope work. However, bondholders are not convinced. "At the end of the day, the project failed because the group could not put up money for the balance development costs," says a representative of a bondholder.
In the Puncak Jalil project, for instance, the remaining cost to completion is estimated to be RM305 million (construction cost RM295 million plus development charges of RM10 million). To restart the project would require sizeable capital that Talam, in its dire straits, could not afford to come up with. This is why Talam is roping in IJM Corp Bhd to undertake the construction of the Puncak Jalil project for RM295 million, inclusive of a 15% margin. The participation of IJM in this project is crucial for bondholders to agree to its debt-restructuring scheme.
IJM into the picture The situation in Talam could be much worse if not for the participation of IJM.
Other than agreeing to become the main contractor for the Puncak Jalil project, a source says IJM has acquired some of the smaller and uncompleted development projects from Talam for a sum of over RM100 million. These include the Monte Bayu condominium project in Cheras, Ukay Perdana as well as some projects in Puchong. IJM has resumed work in these projects and is now marketing the unsold units under the IJM banner.
"This has provided some necessary cash flow to keep Talam running. Nevertheless, IJM also takes this opportunity to increase its exposure in the property development sector as there are not many construction jobs around," says the source.
IJM has yet to finalise its purchase of a 25% stake in K-Euro, Talam's parent company, from Tan Sri Chan Ah Chye. This is pending the signing of the RM3 billion West Coast Highway concession between K-Euro's 60% owned subsidiary Konsortium LPB Sdn Bhd and the government. According to K-Euro's annual report released early August, Konsortium LPB has finalised the technical and financial terms as well as the conditions of the concession agreement with the government. These are now pending approvals.
Should the West Coast Highway concession be signed, a source says the construction of the highway will be undertaken by a turnkey contractor to be set up by IJM and K-Euro on a 50:50 basis. This would allow K-Euro to reap the construction profits as well as cash flow, before the highway commences tolling.
This format of collaboration is visible from IJM and K-Euro's ongoing joint venture in developing some 3,900 acres of landbank in Kuala Langat (near Kota Kemuning, Shah Alam). This is through Radiant Pillar Sdn Bhd, a joint venture set up by IJM and K-Euro with equal stakes. Radiant Pillar owns 70% stake of Canal City Construction Sdn Bhd. The latter has received the Kuala Langat landbank from the Selangor government as payment in kind for constructing a toll-free expressway linking Shah Alam-Shah Alam 2 together with the flood mitigation project. The value of the two projects is RM1.1 billion.
The Kuala Langat landbank will feature prominently in the property development business of IJM and K-Euro. Both companies, through JV Radiant Pillar, have plans to develop the Kuala Langat landbank into an upscale project based on the "Venice" concept of a canal city.
K-Euro is in a better financial shape than its property arm Talam. It has a total borrowing of about RM212 million, against its shareholders' fund of RM228.8 million.
Talam Corp Bhd, a troubled property developer, is pushing for a massive debt-to-equity restructuring scheme that its lenders may find hard to reject. Not that the proposal is favourable, but because the lenders have limited options. The bulk of the debts concerned have no financial recourse to Talam the listed company, but mainly on the company's operating subsidiaries that develop certain housing projects. "Talam's stance is obvious. Bondholders can either accept the scheme on the table or take over the housing projects, which secure the bonds," says a source. The prospect of the second option is bleak. If bondholders were to take over the housing projects, they will have to confront a group of angry house buyers who are getting frustrated over the slow construction progress in Talam's projects.
Inclusive of debts issued by special purpose vehicles, Talam group's total outstanding borrowings amounted to about RM1 billion.
The largest chunk is in the form of an outstanding RM498 million Islamic bond (BaIDS) issued by special purpose debt vehicle Ambang Sentosa Sdn Bhd. Ambang Sentosa had issued the BaIDS and utilised the proceeds to purchase from Maxisegar Sdn Bhd (wholly owned by Talam) the rights to the sales receivables of the Puncak Jalil township project. The BaIDS is secured on the housing project. According to sources, Talam has proposed to settle the outstanding BaIDS issued by Ambang Sentosa with a final settlement of RM348 million. This will be in the form of RM62 million cash (which is already in the escrow account) and the issuing of RM286 million five-year redeemable convertible preference shares (RCPS) in Talam bearing zero interest. While this indicates a haircut of about 30% or RM150 million, Talam has offered to bondholders the rights to a pool of future sales proceeds, amounting to RM69 million, from the sale of the remnants of unsold units.
The group is also proposing to settle in full another outstanding bond of RM196 million in the form of Murabahah notes facility (MUNIF) issued by indirect wholly owned subsidiary Europlus Corp Sdn Bhd. The group plans to replace the MUNIF with five-year redeemable convertible secured loan stocks bearing zero coupon. The issuing of secured loan stocks is preferred over RCPS because the MUNIF is currently secured on some landbanks, apart from sales receivables from development projects that include Bukit Beruntung I, II, and III, Lagoon Perdana, Kinrara Section 3 and other projects.
On another note, the outstanding RM163 million MUNIF issued by Perkspektif Perkasa Sdn Bhd (PPSB), the developer of the Bandar Pinggiran Cyber township project in Cyberjaya, will also be featured in the debt-restructuring scheme. Unlike the bonds issued by Ambang Sentosa and Europlus, the PPSB's MUNIF has an unconditional financial recourse to Talam.
As for the remaining term loan of about RM230 million, Talam has planned to settle it by issuing RCPS or other instruments that are convertible into Talam shares.
Based on maximum scenario, the conversion of all these instruments, which will be issued to replace the group's debts, may dilute Kumpulan Europlus Bhd (K-Euro)'s interest in Talam to about 25%, from 47% currently. "Talam's management is busy conducting meetings with the lenders. A formal bondholders' meeting will be held in September and if approved, these proposals will be submitted for regulatory approvals. The implementation of the debt-conversion scheme is expected to be next year," says a source.
Talam, once known as the most productive house developer, ran smack into trouble last year (2007). It was unable to carry out construction works in its development projects according to schedule. Work progress in its largest project, Puncak Jalil, has been particularly affected. All these have resulted in the group being unable to receive progress claims from end-financiers and hence led to a mismatch of cash flow to meet debt obligations. The management had previously put the blame for these stalled projects on the shortage of sand, steel, workers and the government's suspension of hill slope work. However, bondholders are not convinced. "At the end of the day, the project failed because the group could not put up money for the balance development costs," says a representative of a bondholder.
In the Puncak Jalil project, for instance, the remaining cost to completion is estimated to be RM305 million (construction cost RM295 million plus development charges of RM10 million). To restart the project would require sizeable capital that Talam, in its dire straits, could not afford to come up with. This is why Talam is roping in IJM Corp Bhd to undertake the construction of the Puncak Jalil project for RM295 million, inclusive of a 15% margin. The participation of IJM in this project is crucial for bondholders to agree to its debt-restructuring scheme.
IJM into the picture The situation in Talam could be much worse if not for the participation of IJM.
Other than agreeing to become the main contractor for the Puncak Jalil project, a source says IJM has acquired some of the smaller and uncompleted development projects from Talam for a sum of over RM100 million. These include the Monte Bayu condominium project in Cheras, Ukay Perdana as well as some projects in Puchong. IJM has resumed work in these projects and is now marketing the unsold units under the IJM banner.
"This has provided some necessary cash flow to keep Talam running. Nevertheless, IJM also takes this opportunity to increase its exposure in the property development sector as there are not many construction jobs around," says the source.
IJM has yet to finalise its purchase of a 25% stake in K-Euro, Talam's parent company, from Tan Sri Chan Ah Chye. This is pending the signing of the RM3 billion West Coast Highway concession between K-Euro's 60% owned subsidiary Konsortium LPB Sdn Bhd and the government. According to K-Euro's annual report released early August, Konsortium LPB has finalised the technical and financial terms as well as the conditions of the concession agreement with the government. These are now pending approvals.
Should the West Coast Highway concession be signed, a source says the construction of the highway will be undertaken by a turnkey contractor to be set up by IJM and K-Euro on a 50:50 basis. This would allow K-Euro to reap the construction profits as well as cash flow, before the highway commences tolling.
This format of collaboration is visible from IJM and K-Euro's ongoing joint venture in developing some 3,900 acres of landbank in Kuala Langat (near Kota Kemuning, Shah Alam). This is through Radiant Pillar Sdn Bhd, a joint venture set up by IJM and K-Euro with equal stakes. Radiant Pillar owns 70% stake of Canal City Construction Sdn Bhd. The latter has received the Kuala Langat landbank from the Selangor government as payment in kind for constructing a toll-free expressway linking Shah Alam-Shah Alam 2 together with the flood mitigation project. The value of the two projects is RM1.1 billion.
The Kuala Langat landbank will feature prominently in the property development business of IJM and K-Euro. Both companies, through JV Radiant Pillar, have plans to develop the Kuala Langat landbank into an upscale project based on the "Venice" concept of a canal city.
K-Euro is in a better financial shape than its property arm Talam. It has a total borrowing of about RM212 million, against its shareholders' fund of RM228.8 million.
Sunday, February 22, 2009
Proposal for Labu LCCT still under discussion
2009/02/20
Proposal for Labu LCCT still under discussion BERNAMA
KUALA LUMPUR, Fri:
The proposal for a new low cost carrier terminal (LCCT) in Labu, Negri Sembilan, is still under discussion between the government and related parties, the Economic Planning Unit (EPU) director general Tan Sri Dr Sulaiman Mahbob said.
He said the government had approved the project in principle as it was viewed as a form of private sector investment but there was a need for concerned parties to study the matter with respect to all technical and safety requirements.
"This must be done and the Ministry of Transport consulted on the technical requirements," he said after delivering a talk on the current economic crisis here today.He said this when asked to comment on the current status of the proposal to set up the new LCCT.
Recently, Transport Minister Datuk Seri Ong Tee Keat said a final decision has not been made on whether to proceed with or scrap the proposal to build the LCCT in Labu. In a written reply to Loke Siew Fook (DAP – Rasah) in Parliament, he said a detailed and comprehensive study was being done to ensure that the project was feasible and would benefit the people.However, Ong said, AirAsia Bhd would have to bear the cost of building the new LCCT, as well as include connectivity costs such as road-construction and rail tracks and other infrastructure. - BERNAMA
addthis_pub = 'nstonline';
Proposal for Labu LCCT still under discussion BERNAMA
KUALA LUMPUR, Fri:
The proposal for a new low cost carrier terminal (LCCT) in Labu, Negri Sembilan, is still under discussion between the government and related parties, the Economic Planning Unit (EPU) director general Tan Sri Dr Sulaiman Mahbob said.
He said the government had approved the project in principle as it was viewed as a form of private sector investment but there was a need for concerned parties to study the matter with respect to all technical and safety requirements.
"This must be done and the Ministry of Transport consulted on the technical requirements," he said after delivering a talk on the current economic crisis here today.He said this when asked to comment on the current status of the proposal to set up the new LCCT.
Recently, Transport Minister Datuk Seri Ong Tee Keat said a final decision has not been made on whether to proceed with or scrap the proposal to build the LCCT in Labu. In a written reply to Loke Siew Fook (DAP – Rasah) in Parliament, he said a detailed and comprehensive study was being done to ensure that the project was feasible and would benefit the people.However, Ong said, AirAsia Bhd would have to bear the cost of building the new LCCT, as well as include connectivity costs such as road-construction and rail tracks and other infrastructure. - BERNAMA
addthis_pub = 'nstonline';
Thursday, February 19, 2009
PAAB to make takeover offers for Selangor water assets
PAAB to make takeover offers for Selangor water assets
By Zaidi Isham Ismail
Published: 2009/02/19
PENGURUSAN Aset Air Bhd (PAAB) will make direct offers to take over Selangor's water assets from its four concessionaires, bypassing the state government.This is because the state government has not made much progress since it was allowed by the federal government to spearhead efforts to restructure the water industry.The federal government wants to revamp the water industry by taking over all water assets in Malaysia. The industry has been plagued by funding woes, different rates across states, and various business models.People in Selangor risk paying 35 per cent more for water if the state fails to meet a March 31 deadline to transfer its water assets to PAAB.
"Any delays will cause the public to suffer as this is basic public utility," National Water Services Commission (SPAN) chief executive officer Datuk Teo Yen Hua said.PAAB, which is wholly-owned by the Finance Ministry, has been tasked to take over some of the country's water assets and liabi-lities owned by water concession companies.Selangor had offered RM5.7 billion to its four water concession companies.The four operators are Syarikat Pengeluar Air Selangor Holdings Bhd, Puncak Niaga (M) Sdn Bhd, Syarikat Bekalan Air Selangor Sdn Bhd and Konsortium ABASS Sdn Bhd.It is understood that they are not happy because the offer price is too low and they need to pay back loans.Teo said the issue has to be resolved fast as negotiations have been dragging since early last year at the expense of the people.
"The power of negotiations is in our hands and by March 31 we will start moving in and resolve issues. Right now we can't even discuss the terms which are unacceptable to the firms because we are not even involved in the negotiating process," said Teo.
By Zaidi Isham Ismail
Published: 2009/02/19
PENGURUSAN Aset Air Bhd (PAAB) will make direct offers to take over Selangor's water assets from its four concessionaires, bypassing the state government.This is because the state government has not made much progress since it was allowed by the federal government to spearhead efforts to restructure the water industry.The federal government wants to revamp the water industry by taking over all water assets in Malaysia. The industry has been plagued by funding woes, different rates across states, and various business models.People in Selangor risk paying 35 per cent more for water if the state fails to meet a March 31 deadline to transfer its water assets to PAAB.
"Any delays will cause the public to suffer as this is basic public utility," National Water Services Commission (SPAN) chief executive officer Datuk Teo Yen Hua said.PAAB, which is wholly-owned by the Finance Ministry, has been tasked to take over some of the country's water assets and liabi-lities owned by water concession companies.Selangor had offered RM5.7 billion to its four water concession companies.The four operators are Syarikat Pengeluar Air Selangor Holdings Bhd, Puncak Niaga (M) Sdn Bhd, Syarikat Bekalan Air Selangor Sdn Bhd and Konsortium ABASS Sdn Bhd.It is understood that they are not happy because the offer price is too low and they need to pay back loans.Teo said the issue has to be resolved fast as negotiations have been dragging since early last year at the expense of the people.
"The power of negotiations is in our hands and by March 31 we will start moving in and resolve issues. Right now we can't even discuss the terms which are unacceptable to the firms because we are not even involved in the negotiating process," said Teo.
Tuesday, February 17, 2009
Oil park boon for east coast
2009/02/17
Oil park boon for east coast
By Azura Abasnews@nst.com.my
KUALA LUMPUR: The multi-billion Ringgit Tanjong Agas oil and gas and maritime industrial park project in Pekan, Pahang, is expected to create 30,000 new jobs over the next 10 years.
Deputy Prime Minister Datuk Seri Najib Razak estimated that 5,000 jobs would be created under the first phase of the project, which is scheduled to start this year."In the long run, apart from creating new economic spin-offs, the Tanjong Agas oil and gas and maritime industrial park will provide opportunities for local knowledge workers to be employed in industries from ship repair and maintenance, petrochemicals, and logistics to supplies for the oil and gas industry."
Economically, as a nation, we have to migrate from being dependent on cheap labour to remain competitive. Instead, we need to focus on upgrading our skills to cater for knowledge-based industries that require more technicians, engineers, scientists and professionals in many fields."It is my hope that the development of this maritime industrial park will take note of this and use as many locals as possible so that we can generate more employment opportunities and high-paying jobs for locals," he said at the launching of the project by Sultan Ahmad Shah of Pahang yesterday.
Present was Tengku Mahkota of Pahang Tengku Abdullah Sultan Ahmad Shah, the chairman of Tanjong Agas Supply Base and Marine Services (TASBMS) Tengku Abdul Rahman Sultan Ahmad Shah and Pahang Menteri Besar Datuk Seri Adnan Yaakob.Najib said the development of the park was timely and appropriate for the area. "Apart from being located in Pekan, its location on the east coast of Peninsular Malaysia, where the oil and gas clusters are located, will strengthen the viability of this development and spearhead more economic benefits in the east coast. "The world economic crisis, will eventually, like any other crises before us, fade away."As such, the development of the project could not come at a better time."This is indeed an opportunity for us, be it as businessmen or government, to prepare ourselves for the boom time that will come in the near future. "I believe this project could become one of the catalysts for our economic growth in this trying time." Najib also envisioned that the economic multiplier for the project would be enormous."The supporting industries around this project will come in many forms. "The benefits will flow to suppliers of equipment, financial capital and engineering services, construction, logistics, basic utilities like electricity and water, road infrastructure and many more including the creation of new townships and attracting new foreign direct investment."This development will benefit a lot of companies be it SMEs and large corporations. It is also consistent with what the government is trying to do to stimulate the economy amid the global financial crisis. "The mini-budget that will be released on March 10 will outline some of the initiatives that will generate more economic activities." He believed Malaysia could do well in the oil and gas industry just as it had been successful in the manufacturing of electronics, semi-conductors and hi-tech equipment."I do not see any reason why we cannot replicate the same success in the oil and gas industry. "As it is now, the petrochemical and oil and gas clusters that we have in Gebeng and Kerteh where Petronas and other petrochemicals companies have established their businesses are testimonies to the fact that we can be successful in this area."The development of the park is an extension of this cluster. "More importantly, this maritime industrial park can cater for the needs of regional players in Thailand, Indonesia, Singapore, Indochina and the Philippines."
The project has attracted RM6 billion worth of investment from local and foreign companies like Vantech Dockyard (M); Usatech Marine; Bitari Abadi; Core Competencies; Damini Corporation and Competent Selection.They signed a memorandum of agreement with TASBMS yesterday. TASBMS managing director Mohd Faidzal Ahmad Mahidin said the company was negotiating with more than 10 investors.He said the construction of the park would begin in the early second quarter of this year on a 1,639ha area with the project expected to be completed within the next three to four years.
Oil park boon for east coast
By Azura Abasnews@nst.com.my
KUALA LUMPUR: The multi-billion Ringgit Tanjong Agas oil and gas and maritime industrial park project in Pekan, Pahang, is expected to create 30,000 new jobs over the next 10 years.
Deputy Prime Minister Datuk Seri Najib Razak estimated that 5,000 jobs would be created under the first phase of the project, which is scheduled to start this year."In the long run, apart from creating new economic spin-offs, the Tanjong Agas oil and gas and maritime industrial park will provide opportunities for local knowledge workers to be employed in industries from ship repair and maintenance, petrochemicals, and logistics to supplies for the oil and gas industry."
Economically, as a nation, we have to migrate from being dependent on cheap labour to remain competitive. Instead, we need to focus on upgrading our skills to cater for knowledge-based industries that require more technicians, engineers, scientists and professionals in many fields."It is my hope that the development of this maritime industrial park will take note of this and use as many locals as possible so that we can generate more employment opportunities and high-paying jobs for locals," he said at the launching of the project by Sultan Ahmad Shah of Pahang yesterday.
Present was Tengku Mahkota of Pahang Tengku Abdullah Sultan Ahmad Shah, the chairman of Tanjong Agas Supply Base and Marine Services (TASBMS) Tengku Abdul Rahman Sultan Ahmad Shah and Pahang Menteri Besar Datuk Seri Adnan Yaakob.Najib said the development of the park was timely and appropriate for the area. "Apart from being located in Pekan, its location on the east coast of Peninsular Malaysia, where the oil and gas clusters are located, will strengthen the viability of this development and spearhead more economic benefits in the east coast. "The world economic crisis, will eventually, like any other crises before us, fade away."As such, the development of the project could not come at a better time."This is indeed an opportunity for us, be it as businessmen or government, to prepare ourselves for the boom time that will come in the near future. "I believe this project could become one of the catalysts for our economic growth in this trying time." Najib also envisioned that the economic multiplier for the project would be enormous."The supporting industries around this project will come in many forms. "The benefits will flow to suppliers of equipment, financial capital and engineering services, construction, logistics, basic utilities like electricity and water, road infrastructure and many more including the creation of new townships and attracting new foreign direct investment."This development will benefit a lot of companies be it SMEs and large corporations. It is also consistent with what the government is trying to do to stimulate the economy amid the global financial crisis. "The mini-budget that will be released on March 10 will outline some of the initiatives that will generate more economic activities." He believed Malaysia could do well in the oil and gas industry just as it had been successful in the manufacturing of electronics, semi-conductors and hi-tech equipment."I do not see any reason why we cannot replicate the same success in the oil and gas industry. "As it is now, the petrochemical and oil and gas clusters that we have in Gebeng and Kerteh where Petronas and other petrochemicals companies have established their businesses are testimonies to the fact that we can be successful in this area."The development of the park is an extension of this cluster. "More importantly, this maritime industrial park can cater for the needs of regional players in Thailand, Indonesia, Singapore, Indochina and the Philippines."
The project has attracted RM6 billion worth of investment from local and foreign companies like Vantech Dockyard (M); Usatech Marine; Bitari Abadi; Core Competencies; Damini Corporation and Competent Selection.They signed a memorandum of agreement with TASBMS yesterday. TASBMS managing director Mohd Faidzal Ahmad Mahidin said the company was negotiating with more than 10 investors.He said the construction of the park would begin in the early second quarter of this year on a 1,639ha area with the project expected to be completed within the next three to four years.
Tuesday, February 3, 2009
IJM unit clinches RM545m KL project
Published: 2009/02/03
IJM Corp Bhd (3336) said its unit, IJM Construction Sdn Bhd, has won a RM544.9 million contract for a mixed development project at Jalan Pinang, Kuala Lumpur.It accepted the award from Bahagia Investment Corp (M) Sdn Bhd, IJM said in a statement posted on its website yesterday.The job involves building a 42-storey mixed commercial block comprising a 17-storey hotel, a 4-storey serviced apartment, a 13-storey office space, one level of lower ground and two levels of basement carparks.Construction will take 35 months.
IJM Corp Bhd (3336) said its unit, IJM Construction Sdn Bhd, has won a RM544.9 million contract for a mixed development project at Jalan Pinang, Kuala Lumpur.It accepted the award from Bahagia Investment Corp (M) Sdn Bhd, IJM said in a statement posted on its website yesterday.The job involves building a 42-storey mixed commercial block comprising a 17-storey hotel, a 4-storey serviced apartment, a 13-storey office space, one level of lower ground and two levels of basement carparks.Construction will take 35 months.
Wednesday, January 28, 2009
IJM on track to complete Delhi Metro Line project
IJM on track to complete Delhi Metro Line project
By Balan Moses
Published: 2009/01/28
A MALAYSIAN company is well on track towards completing a crucial part of the 19km New Delhi-Indra Gandhi Internatonal Airport Metro Line by next year. A Delhi Metro spokesman said IJM Corp Bhd, one of six foreign companies handling civil projects under Phase 2 of the Metro Line, was on schedule in complete its projects on the ultramodern network. Chief public relations officer Anuj Dayal said IJM was performing well along with British and Japanese companies contracted to complete civil projects on the state-of-the-art line. "IJM is doing a good job on its part in building the line to the airport. There are no problems at all," he said, adding that it will take just 18 minutes to cover the distance from Connaught Place in the city centre to the airport.
He said the company had met the stringent pre-qualifications for contractors bidding for the project. "It put in a bid along with other top contractors in the world and succeeded in winning a contract," he said in New Delhi recently.The airport line under the second phase of the Delhi Metro Line is expected to be completed in time for the 2010 Commonwealth Games expected to be held in New Delhi. The 440km Delhi Metro network carries 800,000 passengers a day with fares ranging between six rupees and 22 rupees - among the lowest in the world. Some of the lines under the RM7 billion first phase of the project run below buildings in the city centre that are up to 400 years old.
Dayal said the Delhi Metro had the tightest security system among similar networks in the world with every passenger frisked before entering stations and on leaving stations. "They also have to walk through metal detectors while entering stations and exiting them. The Delhi Metro is very high on the terrorist hit list and this is why we have such a tight security." The Delhi Metro has seen two bomb blasts since the project took off in December 2002 - both occurring just outside the entrance to stations.
By Balan Moses
Published: 2009/01/28
A MALAYSIAN company is well on track towards completing a crucial part of the 19km New Delhi-Indra Gandhi Internatonal Airport Metro Line by next year. A Delhi Metro spokesman said IJM Corp Bhd, one of six foreign companies handling civil projects under Phase 2 of the Metro Line, was on schedule in complete its projects on the ultramodern network. Chief public relations officer Anuj Dayal said IJM was performing well along with British and Japanese companies contracted to complete civil projects on the state-of-the-art line. "IJM is doing a good job on its part in building the line to the airport. There are no problems at all," he said, adding that it will take just 18 minutes to cover the distance from Connaught Place in the city centre to the airport.
He said the company had met the stringent pre-qualifications for contractors bidding for the project. "It put in a bid along with other top contractors in the world and succeeded in winning a contract," he said in New Delhi recently.The airport line under the second phase of the Delhi Metro Line is expected to be completed in time for the 2010 Commonwealth Games expected to be held in New Delhi. The 440km Delhi Metro network carries 800,000 passengers a day with fares ranging between six rupees and 22 rupees - among the lowest in the world. Some of the lines under the RM7 billion first phase of the project run below buildings in the city centre that are up to 400 years old.
Dayal said the Delhi Metro had the tightest security system among similar networks in the world with every passenger frisked before entering stations and on leaving stations. "They also have to walk through metal detectors while entering stations and exiting them. The Delhi Metro is very high on the terrorist hit list and this is why we have such a tight security." The Delhi Metro has seen two bomb blasts since the project took off in December 2002 - both occurring just outside the entrance to stations.
Saturday, January 24, 2009
Part of 2nd stimulus plan will focus on construction
Part of 2nd stimulus plan will focus on construction
Published: 2009/01/24
"A PORTION" of the second economic stimulus package will focus on the construction sector, Deputy Prime Minister Datuk Seri Najib Razak said.The sector is an important catalyst to Malaysia's economic growth, he told reporters at the Industrialised Building System (IBS) international exhibition in Kuala Lumpur yesterday.The construction industry has a multiplier effect on about 120 other related and supporting industries, economists said.Najib, in his keynote address, said the sector needs to step up its competitiveness by using new technology such as IBS.
IBS is a construction process that uses techniques, products, components or building systems which involve prefabricated components and on-site installations.Najib urged developers to adopt IBS given its many benefits such as lower construction costs, shor-ter completion timeframes and a reduced dependency on for-eign labour.Last November, the government had issued a directive requiring the Public Works Department and its related agencies to use 70 per cent IBS content for their building projects.
As at January 8 this year, there were 303 government projects nationwide worth RM9.2 billion that can be implemented using IBS technology.
Published: 2009/01/24
"A PORTION" of the second economic stimulus package will focus on the construction sector, Deputy Prime Minister Datuk Seri Najib Razak said.The sector is an important catalyst to Malaysia's economic growth, he told reporters at the Industrialised Building System (IBS) international exhibition in Kuala Lumpur yesterday.The construction industry has a multiplier effect on about 120 other related and supporting industries, economists said.Najib, in his keynote address, said the sector needs to step up its competitiveness by using new technology such as IBS.
IBS is a construction process that uses techniques, products, components or building systems which involve prefabricated components and on-site installations.Najib urged developers to adopt IBS given its many benefits such as lower construction costs, shor-ter completion timeframes and a reduced dependency on for-eign labour.Last November, the government had issued a directive requiring the Public Works Department and its related agencies to use 70 per cent IBS content for their building projects.
As at January 8 this year, there were 303 government projects nationwide worth RM9.2 billion that can be implemented using IBS technology.
Monday, January 12, 2009
2009/01/12
AirAsia's case for its own home
By : DAVID YEOW
NST
DATUK TONY FERNANDES: "The principal cause of moving to Labu was our fear of MAHB’s inability to build a terminal in time. 2011 is fast approaching and we can’t afford a delay because a lot of our planes have already been bought. We definitely need a bigger place."
AirAsia hit turbulence over its plan for a purpose-built airport in Labu, Negri Sembilan. CEO Datuk Tony Fernandes tells DAVID YEOW that having its own terminal is the only way to accommodate the budget airline’s growth
Q: What's the story behind Air-Asia's plan to build its own low-cost carrier terminal (LCCT) in Labu?
A: AirAsia has had three moves; it's not something we enjoy doing. We've gone from operating in Subang to the main terminal at Kuala Lumpur International Airport and then to the LCCT in Sepang, all in the space of seven years. Most airlines don't move in their lifetime.At each stage, the move was prompted by capacity. When we were operating from KLIA, Ma-laysia Airports Holdings Bhd (MAHB) could see that we were going to outgrow the main terminal quickly.But this is something a lot of people don't understand, because when they go to KLIA, it looks empty. So the question people always ask is, why doesn't AirAsia just stay at the main terminal?If you count all the parking bays or aerobridges at the main terminal and its satellite, there are only 55 bays. That's insufficient for AirAsia's entire fleet, let alone in combination with those of Malaysia Airlines and others.
So, MAHB said they would look for a new facility, which led to the current LCCT in Sepang. We were assured by MAHB that we would have good connectivity and low charges, which were the main thing.We went in March 2006. But as soon as we got there, we began to outgrow the capacity. So, we were concerned because the next spurt of growth, which would be coming from AirAsia X (the airline's long-haul affiliate), would be scotched if we didn't have the facilities.Our prediction is that if we continue to operate from the LCCT, by 2011 it would be 4.5 million short in passenger capacity. Already with the current LCCT, we are running by a million passengers short and it's a nightmare.So we started scouting around for land to build a new LCCT.Our first option was with MAHB, but then there was the issue of who would finance it. We said, let's try to do it ourselves this time so the process wouldn't be so slow.
The principal cause of moving to Labu was our fear of MAHB's inability to build a terminal in time. 2011 is fast approaching and we can't afford a delay because a lot of our planes have been bought. We definitely need a bigger place.We looked at 13 sites outside KLIA, and stumbled on Sime Darby's Central Vision Valley project. Subang would have been my ideal choice, I've been a broken record about it. But a lot of the land has been sold, so we abandoned that.
Q: People are concerned that the move to Labu would make the distance longer and connectivity a bigger headache. Is this true?
A: I see the LCCT at Labu as KLIA-East, and not another airport. It's just 8.6km from KLIA, about the same distance from Terminal Five to Terminal One at London's Hea-throw airport.And in a strange way, due to the geography of the land, it's actually closer to Kuala Lumpur. It is 58km from KLCC, compared with 78km to KLIA from the city.It's just off the Nilai highway interchange and is also well connected by rail. It's actually an easier airport to get to.
Q: KLIA serves about 25 million passengers a year. KLIA-East can serve up to 50 million annually. What would you say to detractors who see KLIA-East as undermining KLIA's role as the nation's premier airport?
A: It's two business models. Ours is a low-cost airline, theirs caters to the premium airlines.I guess we also have to look at where Malaysia is going. Does everything need to be in one place?At the end of the day, with good connectivity, we are making Kuala Lumpur the hub. We are serving the Kuala Lumpur tourism market.Clearly we have established the need for a new terminal. The question now is, should it be at KLIA or somewhere else?It's a perfect scenario here. We have a massive piece of land adjoining KLIA, which can meet the needs of an airline that was not there when the KLIA master plan was conceived.There was no such thing as a low-cost airline in Malaysia back then. We came out of nowhere.
Q: Why not use the proposed new expanded LCCT at KLIA, which MAHB now promises to complete at about the same time in 2011 as the one in Labu?
A: Prior to us coming out with the proposal to build KLIA-East, there was no such plan mentioned to us. The only plan MAHB talked about was offering us the terminal opposite the main one at KLIA at a cost of RM2.9 billion, which is substantially more than what we have budgeted for.And on top of that, we wouldn't have our own runway.On the actual date of completion for MAHB's LCCT, we heard that it's fluctuating between 2012 and 2014. This is despite the press release that states it would be completed by the end of 2011.That caused me panic. You're talking about our bread and butter. What am I going to do with all the planes?
Furthermore, we looked at the site MAHB is considering -- we had considered it ourselves initially -- and became concerned about the condition of the soil there.It's swamp land. The treatment of that soil would take a long time before you can start building.And MAHB's plan did not mention a runway. They talked about a runway at some stage, without further details. They also didn't give details about the cost of the new LCCT, which is crucial to us because someone has to pay for that terminal and that someone is AirAsia.We have been complaining that we have been overcharged and it doesn't look like things will change if we continue with MAHB.
Airport charges are fundamental to us. How costly the building of an airport is will result in how expensive the airport charge is.On the other hand, AirAsia is confident that it can build KLIA-East for less than RM1.6 billion, including our own runway, and complete it in the next two years.If we have our own runway next to our terminal, we can cut our operational costs, including environmental benefits from less fuel burn.Since MAHB's announcement, we, as their biggest customer, have yet to get a phone call or word from them saying "let's talk".
Q: Is any sort of government loan involved in KLIA-East?
A: It's going to be completely privately financed and AirAsia is ready to undertake it. The cost would probably be less then RM1.5 billion, probably RM1.3 billion, roughly the price of 10 Airbuses.We have been inundated with calls from investors. So we are confident of this. Even if we have to take it up in our own balance sheet, we can easily finance this because the returns on the project are good and there are a lot of people who want to finance it.In terms of ownership, I think it's too early to say who will own KLIA-East. We might take it up or we might enter into a sale-and-lease agreement with interested parties.
Q: With your new LCCT based in Labu, some people are concerned that you are disrupting the government's plan for KLIA as an international airline hub.
A: Again it's a myth. The hub is not KLIA. The hub is Kuala Lumpur.In the United Kingdom, no one talks about the hub being in Heathrow and everything having to be built around it. The hub is London and there are five airports around it to serve different segments of the population.When we talk about KLIA as the hub, what are we talking about?
The truth is, there is no connectivity between the current LCCT and KLIA that is worth getting excited about.A hub offers the ability to change airlines with a minimum of hassle and a maximum of connectivity. It's impossible to do that at the main terminal. You cannot fly in to KLIA and change to AirAsia without going through Immigration and Customs.The KLIA hub that we think we have has been destroyed in that respect. And don't get me started on the connectivity between KLIA and LCCT.A person flying in from the UK would have to get his luggage, check out of Immigration, pass Customs and take a bus or taxi to take a flight via AirAsia.I rate the bus service as one of the worst in the world for airport connectivity. It's badly managed and doesn't run on time.Or you can take a taxi, which costs you about RM45 to get from KLIA to LCCT. You call that connectivity? You call that a hub?But why is only AirAsia being accused of undermining the KLIA hub?
What about FireFly and their plans to bring in one million passengers to Subang Airport? Shouldn't someone argue that the one million passengers should be sent to KLIA?
Q: But if AirAsia moves into MAHB's new LCCT at KLIA, wouldn't that make it a hub? Wouldn't it be better for the country for AirAsia to move there instead?
A: One reason why we started AirAsia X is because the connectivity at KLIA is poor. There are not that many international connections.That's why we thought that if we don't do something, we are going to lose out because Tiger Airways (a Singapore competitor) has all the benefits of Changi airport.Malaysia only has two European connections, Lufthansa and KLM (Royal Dutch Airlines), and maybe five Gulf airlines.We were scared.
That's why we started AirAsia X. And now we can say we have passengers from Australia who connect with us. Eighteen per cent of passengers from AirAsia's foreign connections stay in Malaysia, while the rest use us to connect elsewhere. By March 2011, we will have flights to London, Japan and the Gulf.In other words, AirAsia has become a hub by itself. You can put us in the new MAHB-proposed LCCT and there still wouldn't be any on-site connectivity.We might be at KLIA but we are still situated at the terminal opposite the main airport. No link, no connectivity, hub destroyed.If we can focus on Kuala Lumpur as the hub, I dare say we could be bigger than Changi by 2013, when we collectively serve up to 55 million passengers a year.Where in anyone's dreams would KL the hub beat Changi? And yet it is near to realisation. The reality to all my fellow Malaysians is, that's income coming into the country.
Q: What about accusations of wastage? That the government has spent all that money building the current LCCT and now we need to build another one, possibly two.A: There's no way AirAsia can remain at the existing facility. Something needs to be built.It's set that we have to build a new terminal. Whether we build it in KLIA or Labu, it has to be built, so there's no money wasted there.Then you say there are two runways at KLIA, we should maximise them first. But MAHB has said that eventually there is a need for a third runway, and guess what we are doing? We are building it now and it's only 7km from the existing two.There is no wastage. Nothing unnecessary is being built.The only duplication I would say is the tower. Because of the distance of the new runway from KLIA, we need our own air traffic control tower.We will finance the construction of the tower, not the government. Department of Civil Aviation officials will have to man it, but we will also pay their income.Q: There has been a lot of negative public perception of this project. People are suspicious of the way the project was approved by the cabinet. People are wondering why Sime Darby, a huge government-linked company, is coming in. The blogs are rife about you benefiting from cronyism. A: I have responded to many of the allegations on the blogs themselves. I have nothing to hide.We are a very negative nation. I think we live in a wonderful country though it's not perfect.But the bad thing is, Malaysians have this bad habit of stereotyping successful people.AirAsia has worked really hard for all that we have for the last seven years, without any handout.Let's look at this situation and the potential cronyism.Sime Darby is a public-listed company. Everything is open, it's all public accounts. It's transparent, everything is an open book.AirAsia is now negotiating aggressively with them on the terms of KLIA-East, no different from how we negotiate with MAHB or anyone.As for the cabinet decision, we put in the proposal six months ago. It's only now that the information has come out. It wasn't an on-a-whim decision. The government doesn't do things like that.Even Penang Chief Minister Lim Guan Eng is asking us not to build the new LCCT in Labu but in Penang. If we are cronies, then why is the opposition asking us to do that? It took me seven years to get the KL-Singapore route. If I was a crony, would I have to wait that long?We are basing the terminal in Labu for many reasons and one of them is the potential of bringing more development to Negri Sembilan and Malacca.The government has been talking about its economic stimulus package, but the government alone cannot be responsible for stimulating the economy.By building KLIA-East, we are creating jobs and pumping money into the country. Sime Darby has an amazing plan for its Central Vision Valley project.KLIA-East can be the first purpose-built low-cost airport in the world. We can radicalise the passenger experience. No one has done that.
addthis_pub = 'nstonline';
AirAsia's case for its own home
By : DAVID YEOW
NST
DATUK TONY FERNANDES: "The principal cause of moving to Labu was our fear of MAHB’s inability to build a terminal in time. 2011 is fast approaching and we can’t afford a delay because a lot of our planes have already been bought. We definitely need a bigger place."
AirAsia hit turbulence over its plan for a purpose-built airport in Labu, Negri Sembilan. CEO Datuk Tony Fernandes tells DAVID YEOW that having its own terminal is the only way to accommodate the budget airline’s growth
Q: What's the story behind Air-Asia's plan to build its own low-cost carrier terminal (LCCT) in Labu?
A: AirAsia has had three moves; it's not something we enjoy doing. We've gone from operating in Subang to the main terminal at Kuala Lumpur International Airport and then to the LCCT in Sepang, all in the space of seven years. Most airlines don't move in their lifetime.At each stage, the move was prompted by capacity. When we were operating from KLIA, Ma-laysia Airports Holdings Bhd (MAHB) could see that we were going to outgrow the main terminal quickly.But this is something a lot of people don't understand, because when they go to KLIA, it looks empty. So the question people always ask is, why doesn't AirAsia just stay at the main terminal?If you count all the parking bays or aerobridges at the main terminal and its satellite, there are only 55 bays. That's insufficient for AirAsia's entire fleet, let alone in combination with those of Malaysia Airlines and others.
So, MAHB said they would look for a new facility, which led to the current LCCT in Sepang. We were assured by MAHB that we would have good connectivity and low charges, which were the main thing.We went in March 2006. But as soon as we got there, we began to outgrow the capacity. So, we were concerned because the next spurt of growth, which would be coming from AirAsia X (the airline's long-haul affiliate), would be scotched if we didn't have the facilities.Our prediction is that if we continue to operate from the LCCT, by 2011 it would be 4.5 million short in passenger capacity. Already with the current LCCT, we are running by a million passengers short and it's a nightmare.So we started scouting around for land to build a new LCCT.Our first option was with MAHB, but then there was the issue of who would finance it. We said, let's try to do it ourselves this time so the process wouldn't be so slow.
The principal cause of moving to Labu was our fear of MAHB's inability to build a terminal in time. 2011 is fast approaching and we can't afford a delay because a lot of our planes have been bought. We definitely need a bigger place.We looked at 13 sites outside KLIA, and stumbled on Sime Darby's Central Vision Valley project. Subang would have been my ideal choice, I've been a broken record about it. But a lot of the land has been sold, so we abandoned that.
Q: People are concerned that the move to Labu would make the distance longer and connectivity a bigger headache. Is this true?
A: I see the LCCT at Labu as KLIA-East, and not another airport. It's just 8.6km from KLIA, about the same distance from Terminal Five to Terminal One at London's Hea-throw airport.And in a strange way, due to the geography of the land, it's actually closer to Kuala Lumpur. It is 58km from KLCC, compared with 78km to KLIA from the city.It's just off the Nilai highway interchange and is also well connected by rail. It's actually an easier airport to get to.
Q: KLIA serves about 25 million passengers a year. KLIA-East can serve up to 50 million annually. What would you say to detractors who see KLIA-East as undermining KLIA's role as the nation's premier airport?
A: It's two business models. Ours is a low-cost airline, theirs caters to the premium airlines.I guess we also have to look at where Malaysia is going. Does everything need to be in one place?At the end of the day, with good connectivity, we are making Kuala Lumpur the hub. We are serving the Kuala Lumpur tourism market.Clearly we have established the need for a new terminal. The question now is, should it be at KLIA or somewhere else?It's a perfect scenario here. We have a massive piece of land adjoining KLIA, which can meet the needs of an airline that was not there when the KLIA master plan was conceived.There was no such thing as a low-cost airline in Malaysia back then. We came out of nowhere.
Q: Why not use the proposed new expanded LCCT at KLIA, which MAHB now promises to complete at about the same time in 2011 as the one in Labu?
A: Prior to us coming out with the proposal to build KLIA-East, there was no such plan mentioned to us. The only plan MAHB talked about was offering us the terminal opposite the main one at KLIA at a cost of RM2.9 billion, which is substantially more than what we have budgeted for.And on top of that, we wouldn't have our own runway.On the actual date of completion for MAHB's LCCT, we heard that it's fluctuating between 2012 and 2014. This is despite the press release that states it would be completed by the end of 2011.That caused me panic. You're talking about our bread and butter. What am I going to do with all the planes?
Furthermore, we looked at the site MAHB is considering -- we had considered it ourselves initially -- and became concerned about the condition of the soil there.It's swamp land. The treatment of that soil would take a long time before you can start building.And MAHB's plan did not mention a runway. They talked about a runway at some stage, without further details. They also didn't give details about the cost of the new LCCT, which is crucial to us because someone has to pay for that terminal and that someone is AirAsia.We have been complaining that we have been overcharged and it doesn't look like things will change if we continue with MAHB.
Airport charges are fundamental to us. How costly the building of an airport is will result in how expensive the airport charge is.On the other hand, AirAsia is confident that it can build KLIA-East for less than RM1.6 billion, including our own runway, and complete it in the next two years.If we have our own runway next to our terminal, we can cut our operational costs, including environmental benefits from less fuel burn.Since MAHB's announcement, we, as their biggest customer, have yet to get a phone call or word from them saying "let's talk".
Q: Is any sort of government loan involved in KLIA-East?
A: It's going to be completely privately financed and AirAsia is ready to undertake it. The cost would probably be less then RM1.5 billion, probably RM1.3 billion, roughly the price of 10 Airbuses.We have been inundated with calls from investors. So we are confident of this. Even if we have to take it up in our own balance sheet, we can easily finance this because the returns on the project are good and there are a lot of people who want to finance it.In terms of ownership, I think it's too early to say who will own KLIA-East. We might take it up or we might enter into a sale-and-lease agreement with interested parties.
Q: With your new LCCT based in Labu, some people are concerned that you are disrupting the government's plan for KLIA as an international airline hub.
A: Again it's a myth. The hub is not KLIA. The hub is Kuala Lumpur.In the United Kingdom, no one talks about the hub being in Heathrow and everything having to be built around it. The hub is London and there are five airports around it to serve different segments of the population.When we talk about KLIA as the hub, what are we talking about?
The truth is, there is no connectivity between the current LCCT and KLIA that is worth getting excited about.A hub offers the ability to change airlines with a minimum of hassle and a maximum of connectivity. It's impossible to do that at the main terminal. You cannot fly in to KLIA and change to AirAsia without going through Immigration and Customs.The KLIA hub that we think we have has been destroyed in that respect. And don't get me started on the connectivity between KLIA and LCCT.A person flying in from the UK would have to get his luggage, check out of Immigration, pass Customs and take a bus or taxi to take a flight via AirAsia.I rate the bus service as one of the worst in the world for airport connectivity. It's badly managed and doesn't run on time.Or you can take a taxi, which costs you about RM45 to get from KLIA to LCCT. You call that connectivity? You call that a hub?But why is only AirAsia being accused of undermining the KLIA hub?
What about FireFly and their plans to bring in one million passengers to Subang Airport? Shouldn't someone argue that the one million passengers should be sent to KLIA?
Q: But if AirAsia moves into MAHB's new LCCT at KLIA, wouldn't that make it a hub? Wouldn't it be better for the country for AirAsia to move there instead?
A: One reason why we started AirAsia X is because the connectivity at KLIA is poor. There are not that many international connections.That's why we thought that if we don't do something, we are going to lose out because Tiger Airways (a Singapore competitor) has all the benefits of Changi airport.Malaysia only has two European connections, Lufthansa and KLM (Royal Dutch Airlines), and maybe five Gulf airlines.We were scared.
That's why we started AirAsia X. And now we can say we have passengers from Australia who connect with us. Eighteen per cent of passengers from AirAsia's foreign connections stay in Malaysia, while the rest use us to connect elsewhere. By March 2011, we will have flights to London, Japan and the Gulf.In other words, AirAsia has become a hub by itself. You can put us in the new MAHB-proposed LCCT and there still wouldn't be any on-site connectivity.We might be at KLIA but we are still situated at the terminal opposite the main airport. No link, no connectivity, hub destroyed.If we can focus on Kuala Lumpur as the hub, I dare say we could be bigger than Changi by 2013, when we collectively serve up to 55 million passengers a year.Where in anyone's dreams would KL the hub beat Changi? And yet it is near to realisation. The reality to all my fellow Malaysians is, that's income coming into the country.
Q: What about accusations of wastage? That the government has spent all that money building the current LCCT and now we need to build another one, possibly two.A: There's no way AirAsia can remain at the existing facility. Something needs to be built.It's set that we have to build a new terminal. Whether we build it in KLIA or Labu, it has to be built, so there's no money wasted there.Then you say there are two runways at KLIA, we should maximise them first. But MAHB has said that eventually there is a need for a third runway, and guess what we are doing? We are building it now and it's only 7km from the existing two.There is no wastage. Nothing unnecessary is being built.The only duplication I would say is the tower. Because of the distance of the new runway from KLIA, we need our own air traffic control tower.We will finance the construction of the tower, not the government. Department of Civil Aviation officials will have to man it, but we will also pay their income.Q: There has been a lot of negative public perception of this project. People are suspicious of the way the project was approved by the cabinet. People are wondering why Sime Darby, a huge government-linked company, is coming in. The blogs are rife about you benefiting from cronyism. A: I have responded to many of the allegations on the blogs themselves. I have nothing to hide.We are a very negative nation. I think we live in a wonderful country though it's not perfect.But the bad thing is, Malaysians have this bad habit of stereotyping successful people.AirAsia has worked really hard for all that we have for the last seven years, without any handout.Let's look at this situation and the potential cronyism.Sime Darby is a public-listed company. Everything is open, it's all public accounts. It's transparent, everything is an open book.AirAsia is now negotiating aggressively with them on the terms of KLIA-East, no different from how we negotiate with MAHB or anyone.As for the cabinet decision, we put in the proposal six months ago. It's only now that the information has come out. It wasn't an on-a-whim decision. The government doesn't do things like that.Even Penang Chief Minister Lim Guan Eng is asking us not to build the new LCCT in Labu but in Penang. If we are cronies, then why is the opposition asking us to do that? It took me seven years to get the KL-Singapore route. If I was a crony, would I have to wait that long?We are basing the terminal in Labu for many reasons and one of them is the potential of bringing more development to Negri Sembilan and Malacca.The government has been talking about its economic stimulus package, but the government alone cannot be responsible for stimulating the economy.By building KLIA-East, we are creating jobs and pumping money into the country. Sime Darby has an amazing plan for its Central Vision Valley project.KLIA-East can be the first purpose-built low-cost airport in the world. We can radicalise the passenger experience. No one has done that.
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